Analyzing the Impact of the ‘‘Code-FLEX Act of 2015’’

by Coalition for ICD-10 on July 30, 2015

The “Coding Flexibility in Healthcare Act of 2015’’ or the ‘‘Code-FLEX Act of 2015’’ was recently introduced in Congress. The Code-FLEX Act requires that Medicare allow claims to be submitted in either ICD-10 or ICD-9 for the 180 days following the implementation of ICD-10. While a dual coding system may sound straightforward, it would require extremely complex and costly changes to major payment, clearinghouse and provider systems that are not practical or feasible. It is simply unworkable, costly, confusing. Indeed, CMS has clearly stated that a dual coding approach is not feasible.

Impact on Patient Care
Individual providers not only have to submit claims for their services but also have to communicate with other parts of the healthcare system. Ordering tests, prescribing and referring all require the communication of clinical information. Having different parts of the patient care process using different languages (coding systems) undermines the reliability and validity of the chain of communication. Most troubling, the communication of health information between providers would be compromised, adversely impacting the quality of patient care and increasing the potential for patient harm. Merely knowing which coding system is being used by each part of the healthcare team would be a major challenge.

Impact on Claims Payment
The massive reengineering of claims processing systems to accommodate dual coding would inevitably lead to payment errors and discrepancies and communication breakdowns due to inaccurate processing and linking of claims across providers. This could leave patients bewildered and faced with either paying bills themselves that should not be their responsibility or trying to sort out the confusion with their providers and payers. Dual coding would actually increase, not decrease, the likelihood of payment errors, serious financial disruptions for providers, and communication breakdowns. Organizations with networks of providers, such as accountable care organizations, would be unable to efficiently communicate across healthcare providers or effectively analyze costs, outcomes of care, and patient safety.

Impact on Healthcare Data
Dual coding would require that the ICD-9 and ICD-10 versions of all systems be identical. The October 2015 update not only implements ICD-10 but also contains many other scheduled and required regulatory and system updates. These October regulatory and system updates have all been developed and tested based on ICD-10. The current ICD-9 version of these systems is out of date with the upcoming October ICD-10 based updates. Making the ICD-9 version of all systems compatible with the ICD-10 version and fully acceptance testing those systems would be very costly and time consuming.

The entire data infrastructure of the healthcare industry has been designed to take advantage of the standardization on a single coding standard for electronic health care transactions mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This standardization has dramatically improved the overall efficiency and effectiveness of the healthcare system. Dual coding would undo this standardization requiring payment, clearinghouse and provider systems to be able to switch back and forth on a claim-by-claim basis between ICD-9 and ICD-10. Payment, quality assessment and claims adjudication systems that involved the evaluation of claims overtime and across providers would have to be rewritten to allow all possible combinations and permutations of mixed ICD-9 and ICD-10 claims

Dual Coding is Unnecessary.
The primary rationale for proposing dual coding is to protect small physician offices that do not make adequate preparations for the October 2015 transition to ICD-10 from financial harm. However, dual coding is unnecessary because CMS has existing claim submission alternatives if a provider is not able to submit an ICD-10 claim on October 1 (see the Coalition’s statement on H.R. 3018, “Coding Flexibility in Healthcare Act”). There has been much concern expressed over a possible ICD-10 related increase in the volume of RAC audits. However, the volume of RAC audits for any individual provider is capped at two percent and this cap will not change under ICD-10. In addition, CMS and the American Medical Association have announced a joint effort to assist physicians in preparing for the ICD-10 implementation that includes greater flexibility in the claims auditing and quality reporting process.

Conclusion
A dual coding system has the potential to undermine the data infrastructure of the entire healthcare industry negatively impact the handling of important patient clinical information. For a health care system – hospitals, health plans, providers, coders, vendors, device manufacturers, researchers, and more – that is overwhelmingly ready and has invested tens of billions of dollars to be ready, a dual coding requirement would be an unmanageable and costly burden, even for physician practices.

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